Najib said the purchase for the Royal Malaysian Air Force formed part of Malaysia's military upgrading program, which has been revived after it was derailed by the 1997/98 Asian financial crisis.

"We are happy to announce that Malaysia has agreed to buy 18 Sukhoi Su-30MKM aircraft," Najib told a joint news conference.

"We recognise the need to have multi-role combat aircraft and we have decided that the Sukhoi is a suitable aircraft to fulfill our requirements."

Najib said the original Su-30MK fighters would be "modified in terms of technical applications" such as adding "suitable weaponry" to meet Malaysia's requirements, and were hence renamed Su-30MKM.

"Financial and technical talks have been held and an understanding has been achieved but there are still some formalities to be settled."

The contract will be sealed later this year, with the aircraft expected to be delivered from mid-2006, he added.

Ivanov said the value of the contract was "tentatively 900 million dollars."

"I believe what matters is not the value of the contract but that it shows that Malaysia and Russia are at military cooperation in the long-term," he said.

"With the upcoming closure of the deal, this shows that Russia is ready for serious cooperation with Malaysia and will supply Malaysia with military technology and know-how."

The deal came just over a year after Prime Minister Mahathir Mohamad's trip to Moscow to assess the capabilities of the Sukhoi jets.

The Su-30MKM will join Russian-made MiG-29N, US-made FA-18/D and the British-made Hawks in Malaysia's combat aircraft fleet, officials said.

They said Malaysia was also considering plans to buy the F/A-18F fighter jets from the United States.

Malaysia has embarked on a major arms procurement spree, including a 1.035 billion euro (972 million dollars) deal last year to buy three French submarines to establish its first fleet of subs.

The government has also ordered British and Russian missile systems worth 364 million dollars, in addition to plans to buy more than 60 tanks from Poland.

Ivanov, the first Russian defence minister to ever visit Malaysia, arrived Sunday for a three-day trip centering on military cooperation, security and nuclear non-proliferation in Asia-Pacific and the anti-terrorism war.

Ivanov said Russia and Malaysia have agreed to conduct a joint military exercise but details have yet to be finalised.

Following a week of major bombings in Saudi Arabia and Morocco that killed dozens of people and blamed on Osama bin Laden's al-Qaeda network, he warned that international terrorism remained an "evil threat" and called for a global approach to wipe off the menace.

Najib said the two countries were concerned about "greater uncertainties" over security in the region and worldwide amid heightened fears of more terror strikes.

Ivanov is to call on Mahathir later Monday before flying to the United States on Tuesday for a three-day visit.

WAR.WIRE